Northern Rock together - Pay the mortgage/secured/unsecured??

texaspete777

Hi all,

I am yet another one who took a Northern Rock Together mortgage. I have read various threads on this, however, I haven't seen anything conclusive in respect to my next move!

I have approx the following debt :

£130000 mortgage @ 4.78%
£8000 secured @ 3.94%
£30000 unsecured @ 4.78%

I have about £6000-8000 cash, depending on how much i set aside for emergencies, or a new iPad (joking). What I'm trying to figure out is, which is the best to hit first?

The options, as I see them are :

- Attack the unsecured loan - If I was ever to separate this from the mortgage, with the intention of moving to another lender, the rate, either with NRAM or another lender, will go up to about 12% (triple the replayment!) so my initial thoughts were to pay this off(or at least a majority) while it is still at good rate which would give me the option to switch lender at a later date while I continue to pay off (and hopefully overpay) my mortgage/secured in the future.

- Attack the mortgage - This would of course mean bringing down the repayments and perhaps bring the possibility of moving to another house(needed for more children!) a little closer, especially when the market picks up in 5 years.

- Attack the secured - I presume this would be portable so would be the same as the mortgage except without the benefit of increasing the equity?

NRAM have advised me to hit the mortgage, but I suspect they just want to keep me shackled in their dungeon.

Any advice on which way to go???

Thanks in advance!!

:cool:

dunstonh

NRAM have advised me to hit the mortgage, but I suspect they just want to keep me shackled in their dungeon.

NRAM are not authorised to give advice. So, I doubt it was advice. They are probably only looking at it from the basis of immediate cost/benefit and not your wider affairs.

Thrugelmir

Unsecured first. As gives you a target to aim for. By overpaying regularly will motivate you to tackle the balance even quicker.

Morgage_Confused

Whats the property value compared to what you owe.

texaspete777

I reckon the property is worth about £115,000 - £120,000.

kingstreet

The ridiculous NRAM variable rate? 4.79%?

There are plenty of lenders who have SVRs higher than that. When they signed up, most borrowers saw Northern Rock's standard variable rate was 7.84%.

Santander's standard variable rate is 4.74%, more or less the same.

Yorkie1

That variable rate is lower than my fixed rate. Consider yourself lucky!

dimbo61

I would check if you would have any ERC by paying extra off any of your debts.
then set up a DD for say £500/700 every month and Overpay the debts.
You know that if you leave NR your unsecured debt would jump from 4.78% to 12%
If you paid off the secured part would you SAVE interest ?
Could you then use the money you paid out each month to overpay the other debt!

texaspete777

- Yes, I am aware that the rate is preferable and I do consider myself relatively lucky.

- Yes, I am aware the rate goes up if I detach it.

What I'm trying to figure out is, if I stay with NR with the debts/rates as stated in my original post, which debt will it be most beneficial for me to pay off a chunk of first???

Thrugelmir

texaspete777 wrote: »

which debt will it be most beneficial for me to pay off a chunk of first???

In these circumstances makes no difference.

kingstreet

texaspete777 wrote: »

- Yes, I am aware that the rate is preferable and I do consider myself relatively lucky.

- Yes, I am aware the rate goes up if I detach it.

What I'm trying to figure out is, if I stay with NR with the debts/rates as stated in my original post, which debt will it be most beneficial for me to pay off a chunk of first???

Can I just say that you are responding to posts that were not a response to you and your thread. A previous post which was #6 before mine was promoted has been removed. This post was talking about NRAM's ridiculous rate and an online petition.

My post and Yorkie's were responding to that individual, not to you.